Now, in Free, he makes the compelling case that in many instances businesses can profit more from giving things away than they can by charging for them. Far more than a promotional gimmick, Free is a business strategy that may well be essential to a company’s survival.

The costs associated with the growing online economy are trending toward zero at an incredible rate. Never in the course of human history have the primary inputs to an industrial economy fallen in price so fast and for so long. Just think that in 1961, a single transistor cost $10; now Intel’s latest chip has two billion transistors and sells for $300 (or 0.000015 cents per transistor—effectively too cheap to price). The traditional economics of scarcity just don’t apply to bandwidth, processing power, and hard-drive storage.

Yet this is just one engine behind the new Free, a reality that goes beyond a marketing gimmick or a cross-subsidy. Anderson also points to the growth of the reputation economy; explains different models for unleashing the power of Free; and shows how to compete when your competitors are giving away what you’re trying to sell.

In Free, Chris Anderson explores this radical idea for the new global economy and demonstrates how this revolutionary price can be harnessed for the benefit of consumers and businesses alike.

Zur Person: Chris AndersonChris Anderson is the author of the international bestseller The Long Tail. He is the editor in chief of Wired magazine and was a U.S. business editor at The Economist. He began his career at the two premier science journals Science and Nature. He holds a Bachelor of Science degree in Physics from George Washington University and studied Quantum Mechanics and Science Journalism at the University of California.

Chris Anderson is editor-in-chief of Wired Magazine. He coined the phrase The Long Tail in an acclaimed Wired article. He is currently working on a new book, entitled Free, which examines the rise of pricing models which give products and services to customers for free.

What happens when advances in technology allow many things to be produced for more or less nothing? And what happens when those things are then made available to the consumer for free? In his groundbreaking new book, „The Long Tail“ author Chris Anderson considers a brave new world where the old economic certainties are being undermined by a growing flood of free goods – newspapers, DVDs, T shirts, phones, even holiday flights. He explains why this has become possible – why new technologies, particularly the Internet, have caused production and distribution costs in many sectors to plummet to an extent unthinkable even a decade ago. He shows how the flexibility provided by the online world allows producers to trade ever more creatively, offering items for free to make real or perceived gains elsewhere. He pinpoints the winners and the losers in the Free universe. And he demonstrates the ways in which, as an increasing number of things become available for free, our decisions to make use of them will be determined by two resources far more valuable than money: the popular reputation of what is on offer and the time we have available for it. In the future, he argues, when we talk of the ‚money economy‘ we will talk of the ‚reputation economy‘ and the ‚time economy‘ in the same breath, and our world will never be the same again.

Analysts estimate there are as many as 1.2 million Web sites that support themselves by selling advertising, through their own sales forces or ad networks. Most of them constitute the vaunted „long tail“ — small sites serving the refined interests of niche audiences, whose existence is premised on the Internet’s near-barrierless opportunity to create and distribute content. But the term „long tail,“ based as it is on such abstruse mathematical concepts as Pareto’s law, can seem bloodless. It hardly does justice to the countless lives made better because of the ad-supported Internet.

That’s where IAB came in. We made a seven-minute movie to put a human face on the long tail. We call it I Am the Long Tail.